What proof of income for self assessment is needed.

[Mummame2222]

Most of my customers don’t request invoices so I don’t do them, it’s time consuming. Will HMRC expect to see them if they audit me?

Not if you aren’t vat registered, does the income all come into your bank account?

What size of business? Do you have a separate business bank account? Do customers pay cash?

No, some is cash but all of it is declared.

Very small at the moment, it’s new. No, some payments are cash.

And yes, have a separate business account.

You could create ‘cash’ invoices and email them to yourself if you feel the need.
I do it with customers who pay DH in cash but don’t want a receipt - I set up a ‘virtual’ bank account for cash on my accounting software and match the cash payments to the invoices.
I think it’s good practice for when MTD ITSA comes in for non vat registered businesses.

i don’t really want to do that if I don’t need to, it sounds like quite a lot of work. I will have lists of customers and the income would that be enough?

I know it’s a different business but it’s what they do in the nail salons/ eyebrow bars in the local area.

@BorgQueen and I have no idea what MTD ITSA is. I’m really in over my head aren’t I 😂

This is what it looks like in practice

Making tax Digital is coming for the 2025 tax year - possibly. They keep chopping and changing.
All your records will need to be in digital form, everything.

https://www.freeagent.com/guides/making-tax-digital/what-does-mtd-for-itsa-mean-for-you/

I have been self employed for several years, although I do issue invoices, I have never had to prove my income/expenditure to HMRC on my tax return.

@BorgQueen I’m using quikbooks atm. So it’s all digital. I haven’t attached invoices for jobs I’ve received payment for but I have receipts/invoices for all costs. I think I should be ok. If I choose not to use simplified expenses then I’ll claim for the van costs. It’s a business cost after all, regardless of where it came from.

There are also some free courses on the open uni regarding all this, I think I might check them out.

I’m assuming quikbooks is similar to freeagent so you can upload digital images of receipts etc. ?

Do you account for cash payments individually or in bulk?
I doubt hmrc are very interested in how you account for income as long as it’s documented tbh.
DH does some sub-contracting work so can be paid for several jobs at once, those direct bank payments simply get put under the ‘Sales’ category.

Yeah, I can upload digital images. I’m also accounting for cash payments individually, helps me keep on top of it all better.

I appreciate all your help and advice, thank you.

I started up Feb 19th, when would this tax return be due?

After April 5th, with any tax payable by January 31 2025. If you have a loss, you can offset it against your tax bill next time, or get a tax rebate if you were in employment.
I imagine you are using the traditional tax year for your accounting dates?
Will you have employment and self employment forms to fill in?

I usually file DH’s in August, once I’ve got details of savings interest etc.

Just be mindful of Payments on account - you probably won’t have them for this year with such a new business but may well have to pay them for the 24-25 tax year.

https://www.gov.uk/understand-self-assessment-bill/payments-on-account#:~:text='Payments%20on%20account'%20are%20advance,was%20less%20than%20%C2%A31%2C000

If you are running a business, you need to do paperwork. Raising invoices is nit difficult, sign up to an online accountancy package which will help you with the required paperwork

Yes I know that. I’ve already had some helpful replies. I don’t want to do unnecessary work.

Invoicing is NOT unnecessary - its a major part of running a business. As a business you receive invoices, you raise invoices and the difference is your profit or loss. How do you think you can run a business without paperwork?

Think of this from HMRC's point of view - how can you prove that you're declaring all your income? If you have digitally created sequentially numbered invoices with corresponding receipts, you're in a much stronger position should you have an inspection. And yes, they're VERY interested in proof of income as so many people try and understand-declare their income to pay less tax...

I don’t. Like I said, shops make lists with names and service on it. I was wondering if I could do a similar type thing. Not sure why you’re being snippy, I’m new to this and just here for advice.

Surely I could just not declare and send some invoices if I wanted to do that! That’s not my intention but I’m not sure I have to have an invoice for every bit of income I receive. I’ll get professional advice. I do recall doing this about 8 years ago, I’m sure I didn’t keep invoices for every customer then (sold second hand goods).

It’s random you could get an enquiry opened at some point although they are very few these days

Depends on the business not all businesses need to issue invoices, it’s not essential